The free-agent point guard agreed to a five-year, $126 million contract, with a player option on the fifth year and incentives that could push the total value to an average annual value of $30 million through 2021-22.

Pelicans general manager Dell Demps was willing to do whatever it took to retain the 27-year-old point guard, another source familiar with the negotiations told Yahoo Sports. And for good reason.

New Orleans lacked significant financial flexibility after importing All-Star center DeMarcus Cousins at February’s trade deadline and pairing him with fellow All-Star big man Anthony Davis. With no other capable point guard in New Orleans, a dearth of complementary talent on the roster, and only $13 million in available cap space to find a replacement had Holiday left, the Pelicans had little choice but to match or exceed whatever other offers Holiday might have received on the open free agent market.

Holiday did not anticipate reaching a deal overnight and initially intended to weigh his options on Saturday, before potentially taking other meetings in Los Angeles over the weekend. But a slew of early deals — the Utah Jazz pulling off a trade for Ricky Rubio, followed by the Minnesota Timberwolves replacing Rubio by agreeing to a three-year deal with Jeff Teague in Minnesota, and Patty Mills deciding to stay with the San Antonio Spurs — may have increased the urgency on both sides. Holiday’s lucrative deal now takes another point guard off the market.

Holiday averaged 15.4 points, 7.3 assists and 3.9 rebounds in 67 games for the Pelicans in 2016-17. He has not played more than 70 games since making the 2013 All-Star team as a member of the Philadelphia 76ers, after suffering various injuries over the years, so the incentives make sense from the Pelicans’ perspective. A max deal would have paid Holiday closer to $175 million.

Holiday also felt a strong bond with New Orleans after the franchise gave him leave to tend to his family following a brain tumor diagnosis for his wife, U.S. soccer star Lauren Holiday. The eight-year veteran’s family welcomed a newborn daughter just before she underwent successful brain surgery.